Beginners Forex Education Forex Basics

Let’s Get Real: Is Day Trading Really Profitable?

Day Trading or also known as Intraday Trading can be very profitable. But, many ask: Is Day Trading really profitable? But, it is not such an easy method to perform. And that is, the frustration of losing money can discourage more than one. Although with enthusiasm, a positive mind, a lot of discipline, and a good methodology, everything is possible and you can get good results at the end of the day.

Day Trading is one of the most complicated and complex strategies that exist, so the vast majority of investors or users lose their money trying. But, for those who are more wrestling, skillful, and consistent, your luck will come and you will have very good wins.


What is Day Trading?

Intraday trading is known as a strategy that is applied in a financial negotiation, especially of purchase and sale, which is carried out on the same day of the business. Day traders or intraday traders use this quick trading strategy to try to make daily profits and not have to wait for long-term investments. These traders must close all their positions before the end of the day in the market.

Financial instruments that are included in the day trading include currencies, stocks, options, and futures contracts. If you would like to be a Day Trader, in the beginning, the fundamental thing is to have a good formation.

What is the Profitability of Day Trading?

On the same day of trading, it makes it possible for high profits to occur or, conversely, large losses. Therefore, the profitability of Day Trading is very variable. It can be around an annual average of between 10% and up to 50%.

Although the most pessimistic say, that every day you lose money and at the end of the year, you get less return than making a long-term investment. But, if we get carried away by the statistics of some big investors in history, such as Peter Lynch (in 13 years) and Warren Buffett (in 32 years or so), the average annual return was 29 and 24% respectively.

If you are a person who only trades and does not invest in stocks in the long run or survive the day-to-day, it is said that you do not possess financial freedom. This means that financial freedom is obtained when the income that is received for the assets, manages to properly maintain the lifestyle and you can live from it every month without problems. Therefore, a well-known phrase for determining financial health is how much passive money is received from assets.

Something very beneficial for day traders is that brokers allow a higher margin for daily trade (about 25% for intraday shopping). In that case, a daily trader who has a minimum set in his account (of about $25,000), will be able to buy shares of up to $100,000 during the same day. But, in that case, half of those shares, must come out before the market closes.

Day Trading Benefits and Risks

The results of all trading operations that are carried out daily, can be very profitable or on the contrary, a total failure. In that case, day traders can get large percentage returns from their investment or huge losses, not pleasant at all.

Daily trading can be risky, especially in the following cases:

  • Poor execution of operations.
  • Not appropriate risk capital.
  • Exchange of game or operations.

A very common strategy in Day Trading is to buy instruments using funds that are not their own. This can increase gains or losses, as the case may be, and in a very short time. If we consider the high risk of daily trading, a day trader will be forced to abandon a losing position almost immediately. In this way, a fatal loss, much higher than the original investment or the total assets, will be avoided.


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